Short selling is generally defined as betting on a stock price to fall and profiting from this slide. "In essence, the business model is it might be an institutional investor or for that matter a retail investor who feels that a particular equity security is overvalued, one way or the other.
An investor would borrow stocks from a broker with the guarantee to return them after a given time. The investor then sells those stocks, hoping their price goes down. He/she would buy them after an agreed time and return them to the broker. If the stock's price goes down, the investor can make money as he/she would then repurchase it at a lower price before returning it to the broker. But if the price goes up, he/she loses money.
Efran noted that the short selling approved by regulators is not a "naked short" and also that the PSE has parameters in place to ensure that defaults don't happen.